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Domestic aviation industry to crash-land this fiscal with Rs 24,000-25,000 crore revenue loss: Crisil

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Mumbai: The domestic aviation industry, which has been severely hit by the coronavirus outbreak and the subsequent lockdown, is expected to crash-land this fiscal with a massive revenue loss of Rs 24,000-25,000 crore, a Crisil report said on Thursday.

Airlines will be the worst-affected segment, contributing more than 70 per cent to the losses (around Rs 17,000 crore), said Jagannarayan Padmanabhan, Director and Practice Leader, Transport and Logistics, Crisil Infrastructure Advisory, during a webinar.

Airport operators are likely to suffer losses worth Rs 5,000-5,500 crore and airport retailers will see a hit of Rs 1,700-1,800 crore, he noted.

Crisil estimates indicate that the Indian aviation industry will “crash-land this fiscal”, witnessing a revenue losses worth Rs 24,000-25,000 crore.

That would reverse the growth trend of around 11 per cent per annum, which the industry has logged over the past ten years, making it one of the most adversely-affected sectors of the economy, the agency said.

Projecting higher losses for the industry, if travel restrictions last longer in hubs such as Mumbai, Delhi, Chennai and Kolkata, Crisil said it expects the aviation sector to take at least 6-8 quarters to reach pre-pandemic levels.

“These are preliminary estimates, and aggregate losses could increase if the lockdown is extended beyond the first quarter,” Padmanabhan said, adding that as and when operations resume, overall operational capacity will hover at 50-60 per cent for the rest of the fiscal.

Consequently, mergers and acquisitions of airlines, and relook at expansion plans of private and upcoming greenfield airports would be possibilities, he noted.



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Written by sortiwa

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